With solar manufacturing giant GCL-Poly winding down its PV project development arm, the company today announced a shares issue in an attempt to raise HK$680 million (US$86.8 million) to pay down its rising debts.
GCL-Poly Energy Holdings Ltd needs cash to feed its seemingly insatiable appetite for expanding its polysilicon and wafer manufacturing capacity and the notice issued to the Hong Kong exchange where it is listed this morning stated proceeds from the exercise would be used for “payment of existing borrowings and for general corporate purposes”.
GCL-Poly last week announced plans to jointly invest – along with JV partner Zhonghuan Semiconductor – RMB9.13 billion (US$1.32 billion) into expanding annual wafer production capacity at the partners’ northern China production lines from 30 GW to 55 GW by 2022.
The move is just part of the company’s headlong rush to carve out market share in an anticipated global PV boom which is seeing all the big players in Chinese solar manufacturing pursue aggressive expansion.
The shares issue is significant as it would involve the sale of 18.3 billion shares for HK$0.45 per share and would amount to an 8.24% dilution of GCL’s current stock.
The parent company also announced last week plans to sell off a majority stake in its GCL New Energy Holdings project development business to a Hong Kong unit of mainland utility China Huaneng Group.